Jurisdiction(s):
United Kingdom

Key definition

Arising basis definition

What does Arising basis mean? Arising basis describes taxing a person on income and capital gains in the tax year when they are earned, received or realised, wherever in the world they occur. It is the default position for UK-resident individuals: worldwide income and gains are charged to Income Tax and Capital Gains Tax in the year they arise, irrespective of remittance. The concept is reflected across UK legislation (including the Income Tax Acts and the Taxation of Chargeable Gains Act 1992) and HMRC guidance, but “arising basis” itself is a descriptive term rather than a defined statutory expression. In Ireland, the position is broadly consistent:...

UK-resident trusts: taxation of foreign income, dividends and interest; exchange rates; offshore fund distributions and offshore income gains; FOTRA; non-resident company receipts; and double tax relief

Published by a LexisNexis Private Client expert

Practice notes

$imgtext$

Conversion into sterling

It is a fundamental rule that, to calculate UK tax, every item of income and gains must be presented in sterling. Where receipts are in a foreign currency, or assets are purchased or sold in another currency, those amounts must be converted into sterling. Accordingly, you need to fix a conversion date and identify the exchange rate applicable on that date...

The general position is that trustees of UK resident trusts are taxed on foreign income on the Arising basis.
When foreign income is taxed on the arising basis, the exchange rate to use is that prevailing on the date the income arises.
If the income arises regularly across the year, it is acceptable to apply an average annual rate.
Where a life tenant of a trust claims relief under the foreign income and gains (FIG) regime, foreign income that is “qualifying foreign income” is not taxed, even if remitted, for the first four years of the life tenant’s UK residence.

For more information see Foreign income and gains regime from 6 April 2025...

To view the latest version of this document and thousands of others like it, sign-in with LexisNexis or register for a free trial.

Web page updated on 22/05/2026

Popular documents

Using the Judicial College Guidelines to assess general damages in personal injury claims

When evaluating a general damages claim, the practitioner ought initially to refer to the Judicial College Guidelines (JCG)...

Tomlin orders in England and Wales: CPR guidance on drafting, confidentiality, approval, variation, enforcement, limitation, CCA issues, court-specific requirements, sample wording and precedents

This Practice Note This Practice Note reviews mechanisms used in settling litigation. A Tomlin order consists of a consent order paired with a schedule. It operates to stay proceedings on terms that have been agreed. The provisions contained in the schedule may remain confidential. This Practice Note describes the scope of confidentiality attaching to the schedule and sets out how it differs from a standard consent order. Sample wording for a Tomlin order is included, alongside links to precedents, as well as guidance on court approval. It also addresses varying, setting aside and enforcing a Tomlin order, including the considerations the court will take into account when handling applications for each. Further guidance is provided on interpreting and applying the relevant provisions of the CPR; however, some courts and divisions impose very specific requirements for both drafting and approval, and for approaching the schedule and confidentiality issues. Accordingly, you must consider the particular rules and court guide provisions in the forum where your claim is proceeding when drawing up the Tomlin order...

Precedent: Deed of Surrender of Lease with Optional Premium, Settlement and Release, Landlord, Mortgagee and Guarantor Consents, Reimbursement and HM Land Registry Provisions (England and Wales)

Date [ date ] Parties [ name of Landlord ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Landlord) [ name of Tenant ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Tenant) [ [ name of Guarantor ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Guarantor) ] [ [ name of Mortgagee ] [ of OR incorporated in England and Wales (company registration number [ number ]) with its registered office at ] [ address ] (Mortgagee) ] Definitions Within this Deed, the terms below shall be interpreted as follows: [ Annual Rent • the annual sum reserved under the Lease; ] [ Insurance Rent • the Tenant’s share of the Landlord’s costs of insuring the Property (as set out in the Lease); ] Lease • the lease of the Property dated [ date ], entered into between (1) [ the Landlord OR [ name ...

Precedent Statutory Declaration: Standard Wording under the Statutory Declarations Act 1835

I, [ name ], of [ address ], solemnly and sincerely state that: [ Matters to be verified, set out in numbered paragraphs ] I make this solemn statement in good conscience, believing it to be true, and pursuant to the provisions of the Statutory Declarations Act 1835. DECLARED at [ details ] this [ day ] day of [ month and year ] Before me ................................................................................ [ signature of the person before whom the declaration is made ] A [ commissioner for oaths OR [ solicitor OR [ insert other qualification ] ] authorised to administer oaths ]...